Warner Bros. Discovery swung to loss of $148 million and saw total revenue decline 6% to $9.05 billion in its third quarter of 2025 as the media giant dangles a “for sale” sign for all or parts of the business.
The overall results were hurt by tough comparisons to the Olympics in Europe in the prior year, as well as a $1.8 billion charge that included restructuring expenses.
Illustrating why so many companies are eying WBD’s studio and streaming business, the unit posted revenue growth of 8% to $5.28 billion and profit growth of 58% to $1 billion. Streaming’s profit climbed 19% to $345 million, while the studios business hit a profit of $695 million, compared to $308 million a year ago, thanks to hit like “Superman” and “Weapons.”
On the flip side, the global linear networks business’ continued to struggle as revenue fell 22% to $3.9 billion, while profit tumbled 20% to $1.7 billion, as the impact of cord cutters took its toll.
WBD continues to expect that its streaming business will generate a profit of at least $1.3 billion and its studios business will generate a profit of at least $3 billion in 2025. The streaming business also remains on track to reach at least 150 million subscribers by the end of 2026.
“We’re on track to create two strong, well-capitalized businesses that can each create significant long term shareholder value,” CEO David Zaslav told analysts during Thursday’s earnings call.
Here are the quarter’s results:
Net loss $148 million, compared to a profit of $135 million a year ago. The loss included $1.3 billion of “pre-tax acquisition related amortization of intangibles, content fair value step-up, and restructuring expenses.”
Earnings Per Share: A loss of 6 cents per diluted share, compared to a loss of 9 cents a share expected by analysts surveyed by Yahoo Finance.
Revenue: $9.05 billion, compared to $9.18 billion expected by analysts surveyed by Yahoo Finance.
Streaming subscribers: Added 2.3 million subscribers for a total of 128 million globally.
WBD generated $701 million of free cash flow during the third quarter, including approximately $500 million in separation-related costs. It also repaid $1.2 billion in debt during the quarter for a total of $34.5 billion in gross debt. It ended the quarter with $4.3 billion of cash on hand.
WBD silent on M&A progress
In October, WBD put itself up for sale, citing “unsolicited interest” from “multiple parties.”
Paramount has made three separate takeover bids, which ranged between $19 and $23.50 per share and were rejected for being too low. Meanwhile, Netflix and Comcast have both signaled their interest in looking at potential deals for the company’s studio and streaming assets. The former has reportedly tapped the investment bank Moelis & Co. to explore a potential bid. Experts who spoke to TheWrap also didn’t rule out Amazon as a potential suitor as the tech giant looks to continue scaling Prime Video and its advertising business.
While both Zaslav and chairman emeritus John Malone have expressed hope for a bidding war, it isn’t guaranteed that one will ultimately materialize.
In addition to continuing on with its planned split into Warner Bros. and Discovery Global, which remains on track for completion in April, the company’s board will also consider separate transactions for those two companies or a deal for the entire combined company. WBD also said it would consider an alternative separation structure that would enable a merger of Warner Bros. and spin-off of Discovery Global to its shareholders.
In its shareholder letter, Warner said it would not make any further announcements until the board approves a specific transaction or determines further disclosure is appropriate or necessary. As a result, the company did not answer any questions on the topic during its earnings call, though Zaslav told analysts an “active process” is underway.
Streaming grows profit, hits 128 million subscribers globally
The total 128 million subscribers included 58 million domestic and 70 million international subscribers.The streaming business saw subscriber-related revenues grow 1% to $2.6 billion during the quarter.
Global average revenue per user fell to $6.64, due to growth in international markets with lower ARPU, offset by international revenue associated with a legal ruling that may require adjustments to prior customer bills. It was also weighed down by a 13% decline in domestic ARPU to $10.40, driven by the impact of previously disclosed distribution deal renewal with a former related party. International ARPU fell to $3.70.
Ad revenue grew 15% to $231 million, primarily driven by an increase in ad-lite subscribers, partially offset by “domestic pricing pressures.” Distribution revenue was flat at $2.31 billion as the company saw a 16% increase in subscribers as HBO Max continued its global expansion. Content revenue fell 26% to $79 million due to lower third-party licensing as HBO Max launched in new international markets.
Looking ahead, the company expects distribution revenue growth in the low single digit range during the fourth quarter. It also expects HBO Max launches in European markets, subscriber growth, its password sharing crackdown and a recent U.S. price increase to boost HBO Max distribution revenue in the first half of 2026.
“We do see some pressure on ARPU in the US for the next three quarters, but then have high confidence of turning back to ARPU growth starting in the back half of 26 in the US,” streaming chief JB Perrette told analysts.
The absence of the NBA will also hurt streaming advertising revenue in the first half of 2026. It also expects “modest upfront marketing and startup costs” in the latter half of the fourth quarter due to HBO Max’s upcoming launches in Germany, Italy, the UK and Ireland in 2026. The service is now available in over 100 global markets.
Studio revenue soars on strong box office run
The studios content revenue soared 26% to $3.1 billion as “Superman,” “The Conjuring: Last Rites” and “Weapons” boosted the box office. Warner Bros. surpassed $4 billion in 2025 global box office revenue after releasing 11 films.
The strong box office performance of those titles, as well as carryover from “F1,” boosted theatrical revenue by 74%. Overall content revenue was also boosted by higher content licensing revenue. Meanwhile, TV revenue fell 13%, primarily driven by lower initial telecast deliveries, and games revenue fell 23%, driven by lower carryover in the current year quarter.
Upcoming DC Studios projects include “Lanterns” in early 2026 on the TV side and “Supergirl” and “Clayface” in summer and fall 2026 on the film side. James Gunn is also writing “Superman” sequel “Man of Tomorrow.”
Warner Bros. Television Group is also expected to deliver more scripted episodes to streaming platforms than broadcast and cable networks in 2026. Projects scheduled for near-term delivery include Hulu’s “Not Suitable for Work,” Netflix’s “Unaccustomed Earth,” Fox’s “Memory of a Killer,” Apple’s “Ted Lasso” and “Shrinking” and the CW’s “All American.”
Cord-cutting, Olympics comparison weigh on linear networks
Global linear networks distribution revenue fell 8% to $2.39 billion due to a 9% drop in domestic linear pay TV subscribers, offset by a 2% bump in affiliate rates. It was also hurt by lower international affiliate rates and subscriber declines.
Ad revenue fell 21% to $1.19 billion due to a 26% decline in domestic audiences and the negative impact of a strong news cycle on CNN and the Olympics in Europe in the prior year, which cut the year-over-year growth rate by 3%. Content revenue fell 74% to $214 million, primarily due to a $578 million impact from sublicensing of Olympic sports rights to broadcast networks throughout Europe in the prior year.
“We’re working through a transition period here. We have given greater flexibility in the recent round of renewals, as others have as well, to some extent across the industry, and we’re seeing some of those benefits come from already,” chief financial officer Gunnar Wiedenfels told analysts. “I do think we’re doing the right thing here as an industry and as a company and I certainly expect a slightly better trajectory in the near to mid term for us.”
WBD last week launched its new CNN All Access streaming service for $6.99 per month. It also plans to launch a TNT Sports streaming service in the U.S., which will include all of the linear networks’ sports content, as well as select content from Bleacher Report and House of Highlights. The TNT Sports streaming app will be available as a standalone service and the company will also look for bundling opportunities. CNN All-Access and the upcoming TNT Sports streamer are also available at no additional cost to pay TV subscribers.
Zaslav noted that sports were not providing enough value for HBO Max in adding subscribers in the U.S., but said it was a “very compelling offering” driving “real growth” outside of the U.S.
“There was some engagement. But the view is for us that HBO Max is much stronger as being a motion picture and storytelling product, not dependent on rental sports,” he added. “So I think it works out very well and Gunnar will be able to take advantage of that with this new app.”
Looking ahead, the company expects the MLB playoffs and new sports rights to drive improvements in year-over-year advertising comparison for the third quarter. It noted that some of the NBA cost savings have been reinvested in Big 12 football and basketball and Big East basketball rights and related production expenses, as well as content and brand marketing across its portfolio, including CNN All Access.
“You’re going to see hundreds of millions of dollars of benefit next year from that transition. The team has done a phenomenal job restructuring our portfolio,” Wiedenfels said. “That said, we’re going to continue executing the same strategy as before. We’re going to be disciplined in the space, but we also acknowledge that sports is going to be one key pillar of our strategy going forward. That is the case for Discovery Global, as it was for Warner Brothers Discovery, and I do think there is going to be more opportunity opportunistically, as we look ahead over the next three to five years.”
